Conventional online order delivery systems present in the current grocery industry face significant challenges in responding to requests for timely, accurate and smooth delivery, while keeping delivery costs low.
A major portion of online orders is being home delivered. But customers are not always available at home to receive the delivery and in general there is a growing reluctance to paying the additional fees requested from the retailers to cover the additional costs to deliver.
Another method of delivery for online orders is conducting the delivery at click-&-collect (or drive through) units which are in store, adjacent to the store and in some scenarios, away from the existing retailer's stores. In such scenarios, the retailer transfers a number of orders to the unit where operators place the orders on racks using barcode based handling systems. The customer is then required to visit the unit within a predetermined time slot and an operator following a concrete procedure delivers the ordered goods. Unfortunately, for the retailers using this method, the final cost is greater than that of the conventional business model where the customer is visiting the store and collecting the items from the shelves by himself. This higher cost combined with the established customers' attitude where they want to pay store prices for online purchases and the razor thin margin of this industry results in making online orders and deliveries non-profitable for grocery retailers.
An additional drawback related with the manually operated click-and-collect systems is the difficulty to handle returns, i.e. the process that a customer needs to follow when returning one or more products purchased via an online order is much more complicated.
Another option for delivery of online orders is the use of lockers. The customers, upon placing the online order, receive a delivery code designating the place and the time slot to fetch the ordered items. Then, the customer visits the designated locker during the predefined time slot and picks up his/her order. This method has a number of advantages compared to the other methods in use. However, locker systems present issues such as low storage capacity and relatively high cost of replenishment.